Krugman has this to say about it:
For those not familiar with how financial markets work, US Treasuries are the ultimate safe asset, used as collateral for everything. Even a hint that some Treasuries might not be honored could bring everything to a screeching halt
Musk and Trump are both in the habit of stiffing people they owe money. If markets even suspect that this habit will extend to Treasuries, God help us
Maybe making money something everybody has to believe in was a bad idea
Quick! Everybody clap your hands and say “I do believe in T Bills!”
It was part of how we got out of the Great Depression — it transferred money from the owning class to people who had debts. We don’t actually want to go back to gold (or any other non-inflationary currency) because it gets rid of the flexibility to do that, which part of how we prevent bad recessions from turning into deflationary recessions.
In any case, having fiat currency, or not, is a separate issue from whether the US will actually pay its debts as promised. And it’s the debt payment that Trump is putting in question.
I’m someone who thinks even the gold standard was bullshit because it relied on a nation to support it.
My point wasn’ the “money” but the “everybody.” There’s tons of different economic models that don’t rely on nations to exist. Maybe we try one of those.
My problems with the current economic system start way before the gold standard.
We are very very far from anything like the Star Trek prosperity society though. I’m not expecting changes to monetary policy to be able to get us there either; they’re a way to moderately improve peoples’ lot, and to shift the balance of power from capital to labor and tiny bit
I worry that by keeping our Ship of Theseus from sinking we’re missing out on something way better
Well, you’re in luck. They’re actively scuttling the ship as we speak. Whether you’re going to like the new one remains to be seen. I have a feeling it will be much smaller and is already full.
We could be, but are also avoiding a lot of drownings that are likely if we try disassembling it while at sea
Yeah, grains have painted us into a corner